In this edition, we discuss the guide recently released by the Australian Institute of Company Directors (AICD) to assist boards to oversee data governance, proceedings brought by the Australian Competition and Consumer Commission (ACCC) against Beacon Products Pty Ltd and Zandox Group Pty Ltd for allegedly misleading sales practices and recent applications to the Takeovers Panel concerning the affairs of Yowie Group Ltd (ASX: YOW) (Yowie) and Pact Group Holdings Ltd (ASX: PGH) (Pact Group).
In Risk Radar, we discuss the AICD and Governance Institute of Australia’s update to their Joint Statement on Board Minutes in the context of the increasing use of generative artificial intelligence (AI) in governance practices.
Governance
AICD releases guide to assist boards to oversee data governance
On 14 May 2025, the AICD released Data Governance for Foundations for Boards, a publication designed to support directors in overseeing data governance. Against a backdrop of increasingly regular cyber incidents and intensifying regulatory scrutiny, the publication recognises the increasingly foundational role that data plays in organisations, outlines key principles for effective data governance and examines how directors can balance innovation, risk management and ethical considerations. Building on the Cyber Security Governance Principles publication released by the AICD in November 2024 (discussed in a previous edition of Boardroom Brief), Data Governance for Foundations for Boards aims to support directors in engaging with issues surrounding data governance and encourage strategic thinking in building data-driven organisations.
Regulatory
ACCC commences proceedings against companies for misleading sales practices
On 12 May 2025, the ACCC announced it had secured leave from the Federal Court to commence proceedings against Beacon Products Pty Ltd and Zandox Group Pty Ltd. The ACCC alleges the companies engaged in unconscionable conduct and misleading or deceptive conduct by targeting small to medium businesses through unsolicited telemarketing. According to the ACCC, the companies:
pressured businesses into accepting goods they neither wanted nor ordered;
made it difficult to return unwanted products; and
falsely claimed that existing, non-terminable supply agreements were in place.
The ACCC is seeking:
declarations and pecuniary penalties against both companies; and
orders against Mr Warren Skry, director of Beacon Products, including a disqualification order, injunction, declarations, and costs.
Mr Skry is alleged to have been knowingly concerned in the conduct.
Legal
Takeovers Panel receives application in relation to the affairs of Yowie Group Ltd
On 14 May 2025, the Panel announced it had received an application from Keybridge Capital Limited (KBC) in relation to the affairs of Yowie. On 9 May 2025, Yowie announced on the ASX a conditional takeover bid for KBC. On 12 May 2025, Yowie announced it resolved to issue new shares under a private placement to wholesale investors (Placement Shares), but those Placement Shares would be escrowed for 12 months under section 703(3) of the Corporations Act 2001 (Cth) (Corporations Act). KBC submits, among other things, that:
the escrow restrictions result in Yowie having a relevant interest in itself in relation to the Placement Shares;
KBC and certain entities comprising the WAM Group have a relevant interest in the Placement Shares (because KBC has voting power of 78.34% in Yowie and the WAM Group has voting power of 45% in KBC); and
for those reasons, the issue of the Placement Shares contravenes the 20% takeover prohibition in section 606 of the Corporations Act.
KBC seeks interim and final orders, including final orders that the Placement Shares be cancelled or vested in ASIC for sale. A sitting Panel has not been appointed at this stage and no decision has been made whether to conduct proceedings.
Takeovers Panel receives further application in relation to the affairs of Pact Group Holdings Pty Ltd
As reported in a previous edition of Boardroom Brief, on 9 May 2025, the Panel announced it had received an application from Mr Jeremy Machet and Scrap Invest Pty Ltd in relation to the affairs of Pact Group and its proposed delisting. On 13 May 2025, the Panel announced that it had received a further application from Mr Jeremy Raper in relation to the same delisting. Mr Raper submits, among other things, that the reasons disclosed for the proposed delisting are false and misleading, the board is not acting in the best interests of shareholders in endorsing it and the proposed delisting has a substantial coercive effect on minority shareholders. A sitting Panel has not been appointed at this stage and no decision has been made whether to conduct proceedings.
Risk Radar
AI in board minute preparation: balancing efficiency against governance risks
On 12 May 2025, the AICD and the Governance Institute of Australia updated their Joint Statement on Board Minutes, revisiting the key principles for effective minute-taking for the first time since 2019. The updated statement addresses the use of generative AI in the preparation of board minutes and emphasises that the benefits of using AI to assist in drafting board minutes must be balanced against the clear governance risks: the incorporation of false or incorrect transcripts, crucial nuance not being captured and the inability to reflect organisational context or sensitive/confidential matters appropriately. Further, boards considering the integration of AI into their minute-taking processes must weigh the benefits of efficiency against the necessity of maintaining accurate and legally compliant records. Boards should note that according to the updated statement, if AI is used to record and produce transcripts of board discussions:
any recording or transcript produced does not satisfy the Corporations Act requirement to keep a record of a meeting in a minute book that is signed by the chair;
any recording, transcript or AI-generated draft minutes that are retained will be discoverable and admissible in court as evidence and will have the potential to conflict with the formal board minutes.
It is prudent for boards to ensure that the company secretary is taking their own notes for the purposes of reviewing draft minutes generated by AI. Above all, it is clear that AI based off its current capabilities cannot displace the role of professional human judgement.